The online deal purveyo late Thursday topped earnings expectations for the fourth quarter, but offset the good news by forecasting a loss of 2 cents to 4 cents a share for the first quarter. That translates into a lot of Hamiltons.

Mark Mahaney of RBC Capital Markets cut his rating on Groupon to underperform, the equivalent of sell, from sector perform, and slashed his price target to $7 a share from $11.

Get ready for some fascinating reading. The Federal Reserve has just released the transcripts from the policy-setting Federal Open Market Committee’s meetings in 2008 — at the height of the financial crisis.

We’re back to a “risk on” environment, write strategists at Bank of America Merrill Lynch in a Friday note breaking down the latest data on investment flows.

Equities saw the largest inflow in 12 weeks, while high-yield bonds saw the biggest inflow in 17 weeks.

Unsurprisingly, investors continue to get out of emerging-market debt and equity. The four-week outflows from emerging-market equity funds is equivalent to 2.2% of assets under management, still shy of the 3% threshold that would trigger a contrarian buy signal under the firm’s “EM Flow Trading Rule.”

The S&P 500 and Nasdaq Composite are gaining more ground and trading near the session’s best levels.

The S&P 500 tacked on 4.13 points, or 0.2%, to 1,843.91, headed toward the day’s high of 1,846.16. The index traders around 0.9% higher for the week. The Nasdaq Composite
/quotes/zigman/12633936/realtimeCOMP was last at 4,280.32 points, up 12.80, or 0.3%. The high for the day so far was 4,284.85 and the index trades 0.3% higher on the week.

The Dow Jones Industrial Average
/quotes/zigman/627449/realtimeDJIA, meanwhile, traded 38.44 points higher, or 0.2%, at 16,171.67 — off the day’s high of 16,191.92, though clinging to a gain of 0.1% for the week.

Developed-markets equities are seeing inflows after “aggressive” outflows in the first week of February, RBS analysts said in a report dated Friday.

The emerging-markets asset class also saw smaller outflows compared to the end of January/early-February period, but both equity and fixed income funds for the asset class remain firmly in the red, as they have been for 12 consecutive weeks, the analysts said.

Developed-markets equities are “back in favor” after having seen two weeks of 0.3% inflows (to the week ended Feb. 19) — more than recouping the 0.4% of outflows they saw during the week ended Feb. 5.

Coffee futures scored gains for seven sessions in a row because of dry weather conditions in Brazil, before pulling back by 1.8% on Thursday. It closed Wednesday $1.726 a pound, the highest most-active futures price close since October of 2012, FactSet data show. Prices trade roughly 53% higher year to date.

Here are some thoughts on today’s action in the stock market from Charlie Bilello, Pension Partners’ director of research :

1) The homebuilder stocks
/quotes/zigman/477673/delayed/quotes/nls/xhbXHB have shrugged off a lot of bad news this week and are leading the market higher today. We had weaker than expected reading in the NAHB Housing Market Index on Tuesday (46 vs. consensus of 56), weak mortgage applications and housing starts on Wednesday, and weak existing home sales today. In spite of this, shares are trading up over 1% on the week.

2) While the S&P 500 is within a few points of a new all-time high, the defensive Utilities sector
/quotes/zigman/246354/delayed/quotes/nls/xluXLU continues to lead (XLU is up 7.5% this year versus a flat S&P 500). This could be a cautionary signal for the markets in the weeks to come.

4) Emerging Markets are leading today, with continued strength in emerging-market bonds
/quotes/zigman/1511363/delayed/quotes/nls/embEMB. While there is supposedly an ongoing “crisis” in emerging markets, market prices are no longer confirming this view. This is a notable change in character and given that sentiment and fund flows reflect extreme negativity in emerging markets, we could be in the early stages of a sharp move higher in these shares.

Barnes & Noble Inc./quotes/zigman/132169/delayed/quotes/nls/bksBKS shares surged on news that private investment firm G Asset Management has offered to buy a 51% stake in Barnes & Noble at $22 a share, quite a bit above its current price level of $18.

G Asset has also proposed to buy 51% of its Nook unit, valuing the business at $5 a share. G Asset believes substantial shareholder value will be created through separating Nook from the retail and college business.

For companies that have reported actual EPS below the mean EPS estimate for Q4 2013, the average drop in the price of the stock two days before the earnings report through two days after the earnings report has been 2.2%. This percentage drop in price is nearly equal to the five-year average of 2.3% for companies that have reported actual EPS below the mean estimate. There has been little difference in the market reaction to upside earnings surprises for Q4 as well.

“The biggest thing over the past week has been that the global risk scare that began in the middle of January…has continued to ease off,” said Dan Dorrow, head of research at Faros Trading. Read more about currencies here.

Do you feel like Carl Icahn’s name has been cropping up more than usual? That’s possible. Activism among investors is at its highest level in five years, according to the latest Goldman Sachs Hedge Fund Trend Monitor.

The number of activist campaigns has increased 23% since 2011 and those campaigns are increasingly targeting larger companies.

“As the number of activist campaigns and the size of targeted stocks grow, non-activist investors should focus on the ability of targeted stocks to sustain returns following a campaign announcement,” said Goldman analysts led by Amanda Sneider in the report dated Feb. 20.

Railroad stocks could be the winners of the recent severe cold weather, according to a note from J.P. Morgan. Natural gas prices have jumped about 45% this year because of the polar vortex, prompting some utilities to switch to coal to keep costs down.

MarketWatch’s Jim Jelter writes:

This surge in demand has shaken coal prices from their long slumber. Since last summer, Powder River Basin coal prices are up about 19% and Central Appalachian prices are up nearly 25% as utilities replenish their stockpiles. The steepest price spike was seen in December, when the first blast of arctic air hit the East.

So what’s this got to do with transportation? Simple. According to the Association of American Railroads, 70% of the coal mined in the United States gets to the power plant by rail. It’s by far the biggest cargo carried on U.S. rails, accounting for 41% of all rail tonnage and 21.6% of rail gross revenue in 2012. And that was a slow year.

Stifel’s David Lutz noted today that there’s been some head scratching about market drivers.

He writes a “What Traders Are Watching” note, which earlier today said:

Many were scratching their heads as the market gravitates towards all-time highs. There are several structural reasons – Earnings are posting stronger, The poor weather is being discounted, the street is extremely short equities, a rotation from EM and Europe back towards the US, Heavy Buyback action – and the catalyst for yesterday? The “great Rotation” from Bonds to Equities getting some attention.

Based on trends from the fourth quarter, investors are likely to continue focusing on corporate profitability when shopping for stocks, according to Chris Collett and David Levine at NASDAQ OMX Corporate Solutions.

With the start of the Federal Reserve’s “taper” and the slow but inevitable increase in interest rates the focus on both “hot sectors” and corporate profitability, efficiency and returns will remain in the spotlight.

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